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CIMAPRO19-P02-1 Exam - Topic 4 Question 118 Discussion

Division A and Division B are divisions of the same group. Division A transfers all of its output to Division B.Which THREE of these alternative transfer pricing bases will prevent any cost inefficiencies in Division A being passed on to Division B?
A) Standard variable cost and D) Market price and F) Standard variable cost plus a profit margin
B) Actual full cost
C) Actual prime cost
E) Actual variable cost

CIMAPRO19-P02-1 Exam - Topic 4 Question 118 Discussion

Actual exam question for CIMA's CIMAPRO19-P02-1 exam
Question #: 118
Topic #: 4
[All CIMAPRO19-P02-1 Questions]

Division A and Division B are divisions of the same group. Division A transfers all of its output to Division B.

Which THREE of these alternative transfer pricing bases will prevent any cost inefficiencies in Division A being passed on to Division B?

Show Suggested Answer Hide Answer
Suggested Answer: A, D, F

by Merlyn at Oct 29, 2025, 08:47 PM

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Angella
3 months ago
F) Standard variable cost plus a profit margin could work too, but it might complicate things.
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Ernie
4 months ago
E) Actual variable cost seems fair. It avoids unnecessary overheads.
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Rupert
4 months ago
I think D) Market price is the best choice. It reflects true market value.
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Emilio
4 months ago
Totally agree with A and D!
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Mariann
5 months ago
Wait, can we really avoid inefficiencies with these options?
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Shawna
5 months ago
E) Actual variable cost seems solid too.
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Leontine
5 months ago
I think D) Market price is the way to go!
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Gearldine
5 months ago
Haha, imagine if they went with "Actual Clown Cost" as an option. That would be a real circus!
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Levi
5 months ago
Hmm, A, D, and F look like the winners here. Can't have those pesky inefficiencies creeping in.
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Tony
5 months ago
A, D, and F are the way to go. Gotta keep that Division B happy!
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Lavonna
6 months ago
I’m leaning towards saying standard variable cost plus a profit margin is a good choice, but I can’t recall if it fully prevents inefficiencies.
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Joesph
6 months ago
I practiced a similar question where we had to choose between actual full cost and actual variable cost, and I think actual variable cost is more efficient.
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Gilma
6 months ago
I think standard variable cost might be one of the answers, but I’m a bit confused about how it compares to actual costs.
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Lachelle
6 months ago
I'd go with A, D, and F. Actual costs could still pass on inefficiencies.
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Pok
6 months ago
A, D, and F seem like the best options to prevent cost inefficiencies.
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Rozella
6 months ago
A) Standard variable cost is a good choice.
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Melinda
7 months ago
I prefer A) Standard variable cost. It keeps things simple and efficient.
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Lottie
7 months ago
I remember discussing how using market price could help avoid inefficiencies, but I’m not sure if it’s the only option.
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Jesusa
7 months ago
This is a good question to test our understanding of transfer pricing. I feel pretty confident I can identify the three correct options here.
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Isidra
8 months ago
Ah, I see now. Actual variable cost and standard variable cost plus a profit margin would also work to avoid passing on inefficiencies. Gotta remember those.
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Marleen
8 months ago
I'm a bit confused on the difference between actual full cost and actual prime cost. I'll need to review those options more closely.
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Una
8 months ago
Okay, I think I've got this. Standard variable cost and market price should prevent any inefficiencies from being passed on.
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Moon
8 months ago
Hmm, this seems like a tricky one. I'll need to think through the different transfer pricing bases and how they impact cost inefficiencies.
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Angella
3 months ago
I agree, market price is the safest bet here.
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Brock
3 months ago
Actual full cost seems risky, though.
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Leota
3 months ago
Standard variable cost plus a profit margin could prevent inefficiencies.
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Stanford
3 months ago
Actual variable cost might work too.
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Miriam
7 months ago
I think using market price is a good option.
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